I’m a big believer in dividend stocks. In fact, it’s rare that I buy a stock that doesn’t pay a dividend. Nothing does a better job of keeping management honest than the responsibility of paying shareholders a regular dividend. Sure, you can fudge your numbers to make your earning per share number every quarter. But cold, hard cash doesn’t lie. You either have it to pay out … or you don’t.
We should always be a little wary of dividend stocks with extremely high yields. Once in a while, you can find a real gem with a fat yield due to a temporary mispricing. But more often than not, when you see an exceptionally high yield, the market is essentially telling you that the dividend is likely to get cut. So with that said, let’s take a look at five dividend stocks you’re better off avoiding. All might be alluring temptresses, but they will potentially lead you on the path of income destruction: Vale SA (VALE), Reynolds American (RAI), IBM (IBM), Verizon (VZ) and Wynn Resorts (WYNN).
Source: InvestorPlace
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